| Centre to rate NGOs on CSR expenditure |
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New Delhi, 25 September The government would rate non- profit organisations according to their past performance, so that it helps companies effectively discharge their corporate social responsibility ( CSR) under the new Companies Act, 2013. According to the Act, companies have to spend at least two per cent of their average profit of the last three years on activities such as eradication of poverty, education, contribution to the prime minister's relief fund and women's empowerment. "The companies can't do this directly. They would have to depend on non- governmental organisations ( NGOs), trusts and civil societies. To help them identify the right agency, we would give accreditation to NGOs based on their performances of the last three years," said Bhaskar Chatterjee, director general and chief executive officer of Indian Institute of Corporate Affairs ( IICA), a body under the Ministry of Corporate Affairs. "For this, we are partnering with the Tata Institute of Social Sciences," added Chatterjee. He is said to be the brains behind drafting the draft CSR rules, for which public comments have been invited till October 8. He was speaking at a seminar organised by a non- profit organisation, Centre for Ethical Life and Leadership. The government estimate suggests 8,000 companies would contribute ₹ 12,000₹ 15,000 crore for CSR activities under the Companies Act. On Monday, the BSE and IICA signed a memorandum to develop a corporate social responsibility index. The index would assess the impact and performance of companies listed at the BSE in CSR activities. The index would also look at the performance of companies in their mandatory CSR spend according to the new Act. Chatterjee said the Act provisions jail terms and fines for directors and independent directors for failing to implement the mandatory CSR spend. For instance, under the draft rule, the government has proposed aminimum fine of ₹ 50,000 on companies and depending upon the situation, it could go up to ₹ 25 lakh. Officers defaulting might face a punishment of a three- year jail term and a fine of ₹ 5 lakh. SY Quraishi, former election commissioner, said the list of eligible activities under the rules was restrictive rather than enabling. " It is imperative to address these issues if the desired impact is to be achieved." An index to assess the impact and performance of CSR by companies listed on BSE in the works, too About 8,000 firms would contribute ₹ 12,000- 15,000 cr for CSR activities under the Companies Act, according to govt estimates |
| Sebi panel: Remove curbs on foreign investment in ₹ debt |
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Mumbai, 25 September A study by a research group under the Securities and Exchange Board of India ( Sebi) has recommended the removal of all restrictions on foreign investments in government and corporate debt, amove which experts say would help the country's inclusion in benchmark debt indices and aid fund flows to the tune of $ 10 billion. "Even though there is foreign appetite for rupee- denominated debt, India has placed many restrictions on foreign investment in rupee- denominated bonds. These include caps on the total as well as limits by investor class, maturity and issuer and have been implemented through a complicated mechanism for allocation and reinvestment," noted the report authored by Ila Patnaik, Sarat Malik, Radhika Pandey and Prateek of the Sebi Development Research Group ( DRG). The report added its views did not necessarily reflect that of the regulator. It said currently, there were different limits for foreign investments in government bonds and corporate bonds, an arrangement further complicated by having sub- limits across assets and investor classes. It recommended that restrictions on ownership, if required, should be in the nature of percentage limits on foreign ownership as is seen in equity markets. "Foreign ownership should be capped at a certain percentage of the outstanding government debt, such as at 10 or 15 per cent of the total government debt. Under this framework, the government debt market should be made operationally similar to the equity market," it said. It also agreed with a recommendation made in the 2013 Union Budget statement on easing access of foreign investors to the onshore currency market. It has also suggested the inclusion of unlisted corporations and alternative investment funds as users of credit default swaps, as well as allowing credit default swaps on unrated bonds and loans. Ajay Manglunia, senior vicepresident (fixed income), Edelweiss Securities, said the move would increase liquidity coming into Indian markets. " These measures will help attract more capital and these measures are also favourable for bringing India towards inclusion in bond indices that exist globally." The panel said foreign ownership should be capped at a certain percentage of the outstanding government debt, such as at 10 or 15 per cent of the total government debt |
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